tv Tech Check CNBC August 18, 2021 11:00am-12:01pm EDT
>> obviously tilray hopes so but i think the other thought is positioning if and when it happens. but it's thought to be eventual. >> all right frank holland, thank you that will do it for "squawk on the street." "tech check" starts now. ♪ good wednesday morning welcome. i'm carl reasons to worry we have warnings on some of the most popular names in tech and then why the bulls won with robinhood coming out after the bell tonight an argument for why irrationality is rational for
now. breaking down the noise in the hood later on three reasons why you're dropping too much coin for coinbase and why a fed official calls crypto hype, noise and confusion. the nasdaq is alternating of losses and gains down day would be the third straight day of losses but a pullback this week as i look at the charts just trading around the flat line. >> it is and from the record high levels that we have seen we haven't seen that being of a pullback. looking at the nasdaq specifically the nasdaq 100 and this particular etf that tracks it over the course of 12 months we have seen significant pullbacks. around 14% last fall here. 10% right here 12% here and around 8% pullback this spring into summer so as they go this doesn't seem
terrible right now but it could get worse. so that's why some traders are waiting with more of an i guess patient attitude towards what's developing with the nasdaq since the selloff began there's been a notable part of the market that has been fundamentally with chinese internet stocks. still jd.com, these three stocks represent the three worst performing stocks on a week to date basis since the selloff picked up steam. so chinese internet and we know the reasons why. regulatory concerns coming to a head again with more headlines from china another key part of the market to watch here is what's been holding up these three types of stocks specifically with regard to health care is outperformers
if you look for a place to hide from the volatility downside-wise it is the health care sibd with the nasdaq and then a key part of the mark to watch is semiconductors. they have been some of the weaker performers this week. this particular etf up 17% but this decline has some people concerned and nvidia, amd, others, some worst performers in the nasdaq this week back of to you guys. >> we'll get nvidia tonight. thank you. with stocks weaker again today let's dive into an investor that's synonymous with the bull rally that's cathie wood and the arcen no innovation etf ark short invest now $2.9 million. that's 13% of the float.
cathie wood will join us tomorrow on "tech check" to talk about her bets, why she makes them and the larger forces at play meantime look at where the ark valuation is right now bring in professor of finance motoroff great to have you back talk about ark you have said that her able and willingness to make big bets is kind of a superpower or at least it has been. right? >> yes it explains why she is so successful at least over the long term but i think a weakest link and people that put the money in the fund is the micro stories of ark weakly thought through. if you don't know value wags the worst thing to do is do valuations and show the world you don't know what you're doing and looking at actual value wagss of companies by ark my reaction is a complete -- the
story is not thought through. >> explain i guess we kind of have to guess. what makes sense to you within that >> look at the macro story and still lose out if the micro stories are wrong and they bet on the weakness at the micro level to catch up with cathie wood and ark and not guaranteed it will. momentum drives everything so ark is a fund built on momentum. it is a very dangerous short bet if you ask me because you can get whiplash. >> good morning. it is deirdre. as the funds grow, receives more assessments under management is it more difficult to make the bold bets and seen the returns how does the size of the funds change the calculus?
>> it's both the size and the profile why cathie wood is never shy about making public a macro bet. the problem with being open and out there is there's a target on your back. one reason everyone is gunning by ark is they feel how burned and in a sense that's the danger of being out there and in the public and i think that she is facing the backlash that that's creating >> danger for who? right? because we are in a very unusual market environment where more short interest actually leads to more interest from perhaps the reddit community once you told me that you have to think about valuations creatively in this environment so could that provide some impetus for the reddit crowd to
further push up the ark fund >> after amc i'm surprised any short seller wants to be out there. you're almost begging for that to pushback to get so it's going to be interesting to see how this plays out because i wouldn't be surprised if people jump on to the ark w bandwagon. before the truth coming out people could lose their money. >> finally, within ark two names to get your comment on coin and robinhood ahead of the print. you said you don't find either that innovative with vulnerabilities to bring them down but they have the networking effects to ride the momentum waves. >> both platforms have taken advantage of the influx of people in the market that never
traded and invested before and pulling people into the market the problem is each platform has a weakness, perhaps even a critical weakness. while robinhood is free they're paid on order flow and could put -- bring the platform to a halt with coinbase it is the fact that it's an opaque -- in spite of the fact of a cheapest and accessible platform it remains expensive and opaque and both platforms have challenges to overcome but i think they're in a sense again an outgrowth of the market where momentum steam rolls everything in the path. >> yeah. really hearty debates at the fund level and component level we'll see what she says to us
tomorrow good to see you. >> thank you. meanwhile if you look for a stock to buy, there's a new call on viacom this morning and a hue lu-esque valuation drives it to a $60 price target and then a partnership in international markets. any partners or deals have been an area of intense investor focus. joining us is the analyst that made that call this morning, wells fargo steve kyline you talk about it as a takeover target but not a stand alone platform in this landscape. >> good morning. i would say it's both. certainly the execution on streaming exceeded our
expectations certainly see valuation upside that organic upside drove the upgrade. that said i don't think there's been a better environment for viacom -- moves we have seen so that supports a little bit of safety to the downside and then coming out bullish this morning. >> it begs the question for whom >> right so i think what we have seen over the last few months is reported that amazon is trying to buy mgm cover ri is merging. there's reports that reece witherspoon's outfit is looked at and there's interest in owning con tnt and viacom is one of the most at scale content companies out there so the major
players whether they have a lot of content or have distribution puts - >> a tech company versus a media company you think is the more likely suitor? >> if we think about who's the leaders in streaming five years down the road, disney, netflix is there amazon is making moves discovery is merging that's five companies hundreds of billions of market cap up into the trillions and have to think about what the peers may do and a few other content libraries out there. i would say viacom is only willing seller within the group. >> in fact you write we think crystallization of value in the stock may be the controlling shareholders' final act before looking to transact. what would perfect timing look
like >> i think it's a seller's market right now perfect timing in part is a seller's market and the stock price and exclude viacom's run earlier this year maybe driven by factors really i think where the stock price could be in about a year is a right sort of setup from a stock price perspective to make that final selling act so in my mind the next 12 months is probably as good as it gets. >> thank you for being with us >> thank you. meantime this morning several social media companies are struggling to come up and enforce rules on content related to the taliban takeover in afghanistan. >> the taliban doesn't hide on social media and embraces it as a tool for propaganda when the members are allowed on the platforms at all
a spokesman maintains an active twitter account and just overnight the count jumped by 10,000 more than on the screen others are the representative of the political office in doha and experts say twitter is more focused on the content than the user the company said the situation is rapidly evolving and will proactively enforce the rules. on facebook and youtube they're banned youtube said it terminated accounts owned or oriented by the group citing the sanctions of the treasury department facebook blocks users who are affiliated with the taliban and removes content to support or represent them the taliban's clams of
government control in afghanistan complicate the policies facebook said it is unto the international community to decide whether to recognize whether the taliban has authority. but this process can take sometime to play out and the companies are making the decisions. back to you. >> they are. thank you for bringing that to us. a irrationality is rat rationality. "tech check" is just getting started. it's another day. and anything could happen. it could be the day you welcome 1,200 guests and all their devices.
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meantime hood is after the bell tonight the first earnings since going public kate rooney, shares up about 4% ahead of the results >> that's right. yeah we'll see what happens on momentum versus real results the stock went public and no real changes to robinhood's business so far and did give forecast in the recent paperwork. expects revenue to grow about 130% year over year and a loss for the quarter ending in june after recording a profit same time a year ago. wall street meantime is watching the net funded accounts which so far grown more in line with the tech company than the average brokerage firm and that growth is key in justifying the 4 billion market cap revenue per user is big here and for the core business it is all about trading volume
more people trade the more money robinhood tends to bring in for payment from order flow and watch down equities versus options and crypto there robinhood forecasted a slow down in the current quarter and expects quote decreased trading it, particularly in crypto they also expect seasonality as they put it going forward. if it is anything like some of the meme stocks, we will see after the bell i'll be sitting down with robinhood's cfo. do not miss it airing on "squak box" tomorrow d? >> thank you we'll stay on robinhood. next guest arguing in a come lum it is irrationality to be
rational in the current market the author of that piece eric newcomer joining us now. it is about the promise and how long to pay off. in this case it is the young user base that can potentially be sold more products, buy things beyond trading. how long do we give these companies and sort of explain this irrational rationality. >> i started off the column laughing two of the biggest oirp ipos this year are letting the customers speculate basically. it tells the market story that two of the hottest companies are companies helping sort of regular people take financial risk and then like you say. stocks sort of are all over the headlines right now. you now have persisted years and
years so i was taking a look at the recent wework call and reading through that story but you could have said many things of uber and persisted so like in a moment of super competitive market it made sense to go all in on the companies even talking to the investors they're worried but it just has been such an ra-ra moment that going long on the creative stories is a powerful strategy. >> right in some cases looking at a tesla, right, which many call the og meme stock -- >> exactly. >> been able to use the momentum to raise more capital and become this sort of huge player and you mentioned uber then you have gamestop and amc and the story's remaining to be
seen and how do you sort through the stories and narratives >> right uber is definitely not where people want it to be the market definitely serums to be under valuing it relative to doordash and cast off the piece of the business and that investors don't seem to be giving it full credit for the stakes it has but i just think that the broader point here is just that tesla is like the best example. right? a sub text of my argument is just that the s.e.c. and regular laters looked at the xuanxus and thrown up warning signs but it feels like they let the market go and very slow to act and seeing with the investigation on tesla's self driving technology and whether everything is up to what they promised it's been
obvious to anyone following tesla is there's lofty claims and you have to wonder are regulators willing to take action before the market corrects itself and then if there's a correction look back at the companies saying you shouldn't have done xyz but you would think the role is to hold them to the rules in the good times. >> you play a game of what if with wework and you say i wonder if newman managed the costs more could they have managed to find the way into the public markets and gotten escape velocity like tesla did. managing costs isn't how the other players have done it. >> right wework's losses wereenormous even by the standards of looking anywhere you look. i do believe that.
if it is a story stock, look at the environment now. there are so many people say wework macks sense coming out of the pandemic if you are investing on the big names saying the nature of work will change when we come out of the pandemic, i think there would be a lot of excitement around wework with a charismatic ceo and if the sheen hadn't come off wework i don't defend adam newman he did sort of grift they did spend so much money and so many projects and not saying -- not trying to rationalize wework but a case study of if they pulled it in a little bit could they have kept the story going and then say about other companies it might still be going. >> there's a school of thought that maybe if they went public
via spac to pull it off. eric, thank you for being with us >> thank you for having me. >> good discussion. forget china. the bulls in spop if i are still out of control at least according to the next guest. the rare bear on shop joins us on the other side of the street n'gonysees dot awhere. sofi is a one-stop shop for your finances designed to work better together. save, spend, borrow, invest, and earn cash back rewards, all in one app. that's how you get your money right with sofi. that building you're trying to sell, - you should ten-x it. - ten-x it? ten-x is the world's largest online commercial real estate exchange. if i could, i'd ten-x everything. like a coffee run... don't just sell it. ten-x it. what happens when we welcome change? we can transform our workforce overnight out of convenience,
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welcome back to "tech check. let's reset near the bottom of the hour stocks this morning about two hours in the nasdaq on the flat line stocks as a whole pretty much flatt. more on that in a moment but a news update with rahal solomon. >> good morning. housing starts slowed 7% in july more than twice as much as expected and a sign of surging construction costs limiting
growth but permits did rise strongly shares of lowe's extending early gain just the stock at the highest level since may. lowe's saying that higher spending on big ticket items is offsetting a slow down for sales of do it yourself projects. target beat second quarter esp aen a $15 billion stock buy back plan. despite that target shares down about a percent today although up more than 40% on the year. u.s. air travel hitting some turbulence tsa reporting 1.6 million air passengers through check points yesterday, that is the lowest amount in over two months. i wonder if it's an indication of the fall. >> yes we are all trying to guess what
the fall will look like. thank you. we are seeing weakness in tech this week as you well know. josh lipton at the nasdaq. >> let's dig in. tesla is making moves to the upside still we should point out down for the week on track for its worst week since june match group in the green on pace to break a 4-day losing streak though still down about 10% this year peloton and amd among the worst performers in the nasdaq 100 amd hit that all-time high august 4th since then down 15%. ending on nvidia which ripped up about 50% so far this year about 7% off the all-time high hit on july 7 far, far outperforming the smh and reporting today. a big number to watch q2 data center revenue
the street wants to see $2.27 billion there. back to you all. >> josh, thank you. day three of the reality check series looking at the other side of the street or the rare sell calls on consensus buy names. today is shopify despite the pandemic boosting the boom the shares overvalued joining us is dan romanoff thank you for the time. >> thank you. >> you don't mess around your report begins not with the word shopify but narrow mote shopify and looking at the amount of revenue growth to see how many years to justify the current valuation. right? >> yeah. that's correct just in a nutd shell we think that shopify is a great company. the strategy is executed well. an element we struggle with is
valuation. and i think that investors -- it remind me of the internet bubble disconnected from reality. the growth has been great. the metrics are impressive but the assumptions to believe to support a stock price of around $1,500 a share are bullish to the extreme in our view. >> yeah. when we talk about the narrow mote you refer specifically to adobe and saelesforce what's the threat? >> we think that competition is a bigger risk than normal for software companies of course salesforce has a company and adding features. they have a full fledged
marketing hub that i think adds a compelling value proposition they're seen as leaders in that area and not something that shopify can bring to bear so i think that is a hole in the platform generally speaking demand ware in particular is a high end enterprise product where shopify historically is a product for the smb market so certainly demand ware is a more robust platform. >> dan, you are talking fundamentals but as we have been talking about in the show this is an unshl market where companies like amc and gamestop have become completely detached so taking a look at shopify that is making a very interesting run in the e-commerce space up against amazon and partnerships with google, why not a shopify
in this market environment >> certainly amazon's another great competitor just this year they made two acquisitions that are basically building out the elements of an e-commerce platform for sellers to use that amazon doesn't have right now so the ability to offer capital to its merchant selling on the amazon, a complete software package to allow them to sort of better manage their various store fronts and wherever else they sell and this is important and elevates amazon from a software perspective. in this environment, sure, obviously e-commerce is booming throughout the covid pandemic and i think that is sort of stepped forward. we'll see that continue and i would say i get a lot of calls
leek this to say why are you so bearish on shopify and actually a little ahead of consensus on revenues for this year and next year and focus on the long term and when you start to compare it to amazon you have to get really big numbers over the long term to support the valuation levels of shopify and where we struggle. >> that's a nuanced view and one that the viewers definitely are encouraged to hear thank you very much. appreciate that. we'll talk to shopify's harley fink el stein next week. >> look at tesla on the move today higher we learned just this week that nhsta launched a probe into the autopilot system new two senators are urging the ftc to launch a probe around
whether the company used deceptive marketing. shares are up about 3.5% apple and the esg efforts. "tech check" is back in two minutes. jerry is here! j! mate, how are ya!? it's so good to see you. good to see all of you, yeah! why is jerry so... popular? it's been like this ever since we started using workday. what do you mean? it makes it easier to develop great relationships with our suppliers. now everyone, everywhere loves jerry. they sure do. they do. they really do. mmhmm. workday. finance, hr, planning and spend management for a changing world. if your money is working toward the same goals,
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amid a broad corporate esg push yesterday touring the campus with apple's vp of environmental policily sa jackson a former epa administrator herself. i asked how apple plans to play a role in the infrastructure bill. >> what we do is policy. businesses engage in washington and with our policymakers on issues that we think are important and engaging on clean energy and climate change for years so we are proud of the fak that we were i think the first company to come out in favor of the clean energy standard which is part of that infrastructure bill >> also yesterday the iphone maker unveiled 15 companies joining the program. the focus on investing to be
apple suppliers making the supply chain neutral by 2030 and in light of the climate change report warping of a code red jackson tells me that the effort couldn't be more important. >> to create more urgency for all of us. this is the time when business leadership couldn't be more important. this is saying to our customers, to the world that we get it, that the way we have been doing business has to be good for the planet >> the debate over apple's latest software app continues to draw backlash from privacy experts. i asked jackson how the new feature balances with the emphasis of privacy on the esg
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>> and next guest's favorite rapper might be lil john but with esg focus tomorrow ark invest cathie wood. that is at 11:30 eastern we are back in just a moment i think you're going to like it here. umm, why is everyone... throwing things at me? look, as cfo it's my job to be ready for whatever's next. that's why i have my finance team, randomly hurl things at me. it's also why we use workday. it gives us insights, so we quickly pivot our strategy, people, planning, you name it. sorry, sir. i will aim straight at your next step. see that you do. would you like some coffee? workday. the finance, hr, and planning system for a changing world. ♪ as i observe investors balance risk and reward, i see one element securing portfolios, time after time. gold.
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the next big thing neo banks. these platforms offer banking services with fewer fees and one announcing today to go public with a spac deal and offers a promise to be green and will not invest in fossil fuel companies and plants trees per debit transaction. joining us is aspiration ceo andre churny good to see you. congratulations on this. >> thank you. >> i hope you'll explain how the card works, fees and then the tree planting. how does that work versus user growth >> aspiration is a platform for action one of the examples is what you mentioned which is the aspiration spend and save account that not only makes
people's deposits fossil fuel but to do things like planting a tree with every purchase that program will allow the customers to plant a tree every time they make a purchase. buying a cup of coffee, every time we round up the purchase to the nearest dollar whatever the size is we're planting a tree every time and launch that in april of last year and the community since then planted 35 million trees and more than in central park every day and it speaks to customers looking to integrate sustainability in the fight of climate change into what they do and the individuals we serve and the businesses to serve, as well. >> you do market it as the only card that literally takes miles
off of the planet. can you talk about how broad the addressable market is? how many consumers are interested in that card delivering this? >> it is enormous. there's a lot of traditional banks going after the people hunting for the lowest fees and the paycheck two days earlier and we are competitive on that but the people coming to aspiration is a third of the market consumers. people are thinking about environmental, sustainability, ethics as they're making daily spending decisions buying clothes, buying coffee, deciding what kind of eggs to buy in the grocery store they've never had a financial institution built for them and they've never really had a platform to make sustainable action easy and automated. that's what we do, offering both financial products that are better for the planet and better for them, but also
sustainability tools that have the direct impact they're looking for. >> i noticed in your investor presentation that you use a metric that i wasn't familiar with, and that's adjusted edibtam. what does the "m" stand for? >> marketing because of the lin manuel-miranda to cost ratio we have, our customers are coming to aspiration because they're looking to make a difference, looking to make an impact. that means we have very, very high cross-adoption between our products 60% of our customers who are signing up for our aspiration save account will sign up for at least one other revenue-generating product within the first year and very, very high retention. leading retention, most likely. >> what do you - >> and that leads to very long relationships. >> why do you adjust for
marketing? i've noticed other fintechs don't use that metric? >> because we have a very different kind of relationship we're seeing much higher cross-adoption, much higher retention and that means we're investing in these 12 to 1 lifetime value cost acquisition customers. we could be turning down marketing or shutting off market and be cash flow positive but we look at that as a capx investment for them. >> fascinating we'll see what kind reception it gets thanks. confident in your coin base position our next guest says, you may have dropped too much coin to get there. three reasons why he says that stock is overvalued. that's up next stay with us
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anti-trust bills going after big tech in congress members of amazon's policy team have recently contacted a small number of third-party sellers to set up meetings to discuss the legislation, according to an email viewed by cnbc can you go to our website to read more about that story right now, as we continue to watch amazon's lobbying efforts and now communication efforts, too. >> guests told us the other day that amazon may be at most risk for that regulatory scrutiny meantime, take a look at coin base they are up 11% over the last month. our next guest has a warning for investors and trimming his price target from $220 to $210 the new note, quote, three signs you may be overly bullish on coin base. lay this out for us. has to do with creeping competition, right >> always great to be on your show coin base, there's some
idiosyncratic coin base issues whether or not you're bullish on coin base, we highlighted three things one, they started losing share in bitcoin their volumes of bitcoin, overall market volumes, it's starting to come down. they lost 1.1% of share. the second thing is the new users and existing users are trading less on the platform in q2 they traded less than in q1 a third one, which is the most important one, in my view, you're looking at institutional yields they're about 50 times versus regular yields this is kind of a take rate they get from investors but they keep coming down. to me, this is a preview of the future of what crypto trading would look like, which is essentially going to be free >> dan, a few weeks ago we talked to the founder of binance cz, who is making a big push to align that platform with compliance and regulation.
coin base has really been seen as the gold standard in terms of that regulatory oversight. do you think that he's going to have any success there they are as of now the largest platform. >> yeah. for sure, they have a huge moat because people use them but i think the regulatory edge is something they have a competitive advantage in it's becoming more and more commoditized and i think it should be free and eventually will be free. regardless of regulatory advantages, over time, i expect the margins or the yields or the take rates on bitcoin trading to come down and be more synonymous with institutions. that's the big bear case on coinbase it's share loss, users trading less and shrinking yields. >> it's fascinating. the compression. i guess i'm wondering, is there any way for any platform to adjust their model that would a lou them to provide additional
value in some way that would justify a premium on fees versus their rivals >> this is a silver lining in the reporting and we hee lighted it in the note the more they can diversify away from trading -- you make a great point. the more they can diverse tie -- that's good for them and the good news this quarter was that the amount of services or subscription and services as a percent of the total revenue actually ticked up slightly from the first quarter. this is a positive this is their way to survive, actually not to rely on fees anymore. >> at the same time, that's what everyone in fintech is trying to do, like robin hood, who we'll hear from. thanks for being with us. maven becoming the first u.s. female-backed female founded unicorn in the space with a valuation of over $1
billion. i spoke to maven founder, kate rider, who led that latest round. you can check out the entire conversation on our show, linkedin and twitter pages it was a great conversation. a great milestone in the space. >> very cool very cool. cisco and nvidia tonight let's get to "the half." >> thanks so much. welcome to "the halftime report." i'm scott wapner the only question that matters to your money, are we about to have the biggest correction and which stocks might be most vulnerable joining me, stephanie link, krnks's jim cramer, the host of "mad money" and he's at the desk with me today and i'm so happy about that let's take a look at stocks. we're down across the board, except the russell, but it's been down lately and a lot the dow is holding on to 35,000, a loss of 40 points. the s&p is a fractional loser by six. nasdaq, let'